Most wholesalers try to tie up contracts for next to nothing too, so don't feel too bad about looking cheap.  

Back in the day water was cheap and more expensive to install individual lines coming from the street so many developers passed on it.

There are plenty of cheap hotels, just don't stay in the 'tourist' areas!

A cheap motel room with 2 beds is $400/week. 

I would like to invest in cheap fixer-upper homes for the price of 20-40K to remodel myself and then rent them out.

Just do your DD thoroughly and be extra careful if you're about to buy dirty cheap properties with high cashflow.

But keep in mind, property management is not cheap.

I read BP's tax strategies book and did my bookkeeping for the year so I'm pretty familiar about tax strategies for investment properties.I'm currently splitting rent with a friend at a cheap apartment.

Most investors don't get that and will look for cheap neighborhoods.

As my non-real estate friends stated at dinner "when i move in, I just want to move in, not fix a thing" ... think about it like that, and if the basement isn't finished,  it's  not going to get those who don't want to do anything else.The brick in the front looks like it needs a power wash, this would be  a cheap and easy fix!